Nav view search

Navigation

Search

The country√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs main economic and social indicators improved in 2010, with restored overall growth (5.5%) and a healthier budget situation. The current account surplus grew despite inflation above the target level.

These advances were due to higher investments for the construction of facilities for the Africa Cup of Nations football tournament (Coupe d√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬ĘAfrique des Nations√É‚Äö√ā¬†√É¬Ę√Ę‚Äö¬¨√Ę‚ā¨Ňď CAN 2012) and infrastructure projects for the 50th anniversary of independence celebrations, and to improved international circumstances bringing about better prices for Gabon√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs raw material exports.

√É‚Äö√ā¬†

√É‚Äö√ā¬†

Figure 1: Real GDP growth (C)

Source:IMF and local authorities√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę data; estimates and projections based on authors√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę calculations.

Figures for 2010 are estimates; for 2011 and later are projections.

Despite a projected slowing of growth in 2011, budget and current balances should improve in 2011 and 2012 after the start, in the second semester of 2010, of projects to upgrade main roads, process timber locally and build low-cost housing.

These projects should meet the serious concerns of the population by providing material benefits, jobs, housing and welfare.

Public administration, education, health & social work, community, social services

-

-

Other community, social & personal service activities

-

-

Other services

23.1

29.2

Gross domestic product at basic prices / factor cost

100

100

Source:AfDB Statistics Department; national authorities (DGE).

Figures for 2010 are estimates; for 2011 and later are projections.

Growth remains strong as in the previous five years. GDP grew by 8.8% in 2010 compared with the growth attained in 2009, which was 9.9%. This is projected to reach 10% in 2011. Growth is mainly driven by the service sector (14.5%), followed by the industrial (10.2%) and agricultural (6%) sectors. Within the agricultural sector, the fishing sub-sector rebounded in 2010 while the other sectors remained fundamentally unchanged. The service sector√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs leading role was primarily driven by high growth in hotels and restaurants, financial intermediation, public services and real estate.

In terms of the structure of GDP, last year√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs dominant role of the service and the agricultural sector largely remained unchanged. Thus, in 2009 the most dominant sector of the economy in terms of its share remained the service sector at about 43.9% of GDP. This is followed by the agricultural sector with a 43.2% share in GDP. The industrial sector√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs share remained largely unchanged from last year with its share of GDP at about 13.0%. The manufacturing sector, within the industrial sector, also remained feeble in 2009, at 4.9% of GDP (Table 2).

As regards prospects for 2011 and 2012, it is likely that this excellent growth will continue based on the government√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs recent forecasts. In 2010 the government launched a new five-year plan √É¬Ę√Ę‚Äö¬¨√Ę‚ā¨Ňď the Growth and Transformation Plan 2010/11-2014/15. This plan, beginning in fiscal year 2010/11, envisions the agricultural sector to be the major source of economic growth. Industrial growth is also a particular focus and the government plans to promote the sector using both export-oriented and import-substituting industrialisation policy. The industrial sector is thus expected to grow at a faster rate than other sectors. In agriculture, the plan calls for a shift to high-value crops, a focus on high-potential areas, the commercialisation of smallholder farming, and the development of large-scale, commercial agriculture. Expanding infrastructure, such as roads, and power and water supply, is also expected to support the realisation of this strategy. In the base case scenario, Ethiopia√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs economy is projected to grow at an average annual rate of 11.2% from 2011 to 2015. In this scenario, agriculture on average will be growing at 8.1% per annum. Industry and services are expected to show an average annual growth of 20% and 11%, respectively. In the best case scenario the government envisages 15% growth in GDP with agriculture also growing at 15%, nearly doubling the base case scenario of 8.1%, while the other sectors√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę growth reaches the base case level.

Except for the last three years when inflation and foreign exchange became major problems, the macroeconomic performance has been very good. But the growth projections for the agricultural sector are based on unprecedented expectations given the traditional dependence on rain-fed agriculture. The sustainability of this growth is also questionable when one takes into accounta low level of domestic resource mobilisation and the shortage of foreign exchange.

There is a need to focus on bringing about major structural change in the economy to ensure the sustainability of economic growth.√É‚Äö√ā¬†The country has experienced significant growth in the last five years. However, when judged in the context of the structural problems confronted in the period under analysis, its sustainability is an issue. Growth is accompanied by a marked absence of structural transformation. Moreover, the sources of GDP growth were an intensive use of resources, especially labour and land, and the outcome still depended on good weather. Productivity growth played little part. This should not come as a surprise, however, given an economy that is operating with backward technology, rain-dependent agriculture, and vulnerable to external shocks. Economic growth, especially in urban areas, is also accompanied by rising inequality with detrimental impact on poverty reduction. Thus, if the country manages to attain even the base case scenario envisaged in the new five-year plan for the years 2011 and 2012, it would be a great achievement.

Domestic demand is still dominated by consumption. Compared to 2009, consumption marginally increased in 2010, by 7.8%. Private consumption is the main contributor to this growth in consumption. Gross capital formation has also increased by 11.5% in 2010 and is projected to grow by 13.3% in 2011. Both public and private capital formation contributed to this trend but the public sector√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs contribution was nearly double that of the private sector. In the external sector, imports have shown an increase of 5.7% in 2010 and are projected to decline by 3.4% in 2011. Exports grew by 1.3% in 2010 and are expected to increase further, by 14.8%, in 2011. The negative trade balance remained substantial in 2010, though projected to improve in 2011. Exports and investment are projected to grow to over 30% of GDP during the 2011-15 five-year plan but these figures seem ambitious √É¬Ę√Ę‚Äö¬¨√Ę‚ā¨Ňď the current GDP level of exports and investment do not warrant such expectations. A more realistic level of export growth, combined with the plan√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs projected growth of imports (to over 45% of GDP), are likely to strain the balance of payments in the years 2011 and 2012. (Table 3).

Table 3: Demand composition

√É‚Äö√ā¬†

Percentage of GDP (current price)

Percentage changes, volume

Contribution to real GDP growth

2002

2009

2010

2011

2012

2010

2011

2012

Gross capital formation

31.6

24.9

2.4

11

2.5

0.7

3

0.7

Public

6.8

6.9

1

13.6

3

0.1

1

0.2

Private

24.8

18

2.9

10

2.3

0.6

2

0.5

Consumption

52.2

55.1

4

4.1

3.9

2.6

2.7

2.6

Public

15.1

15.4

1.6

2.8

2.8

0.3

0.5

0.5

Private

37

39.7

4.9

4.7

4.3

2.3

2.2

2.1

External sector

16.2

20

-

-

-

2.2

-1.5

1.6

Exports

55.5

56.4

4.5

3.7

5.3

2.2

1.8

2.5

Imports

-39.2

-36.4

-0.2

8.2

2.1

0.1

-3.3

-0.9

Real GDP growth rate

-

-

-

-

-

5.5

4.2

4.9

Source:√É‚Äö√ā¬†Data from national authorities (DGE); estimates (e) and projections (p) based on authors√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę calculations.

The 2010 budget, largely based on domestic funding, focused on infrastructure projects (two-thirds of government investment), including repairing roads and building new ones. This policy, backed by Gabon√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs emerging-country partners, eased budgetary tensions, boosted GDP growth and improved the external balance.

The search for emerging partners should strengthen macroeconomic policy in 2011 and 2012 and perhaps curb inflation better and make debt more sustainable.

Fiscal Policy

Repayments on the government√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs external debt are set to increase because of higher interest, while internal-debt servicing will decrease by a greater amount because of lower payments of both interest and the principal, resulting in a slight drop in overall debt service in 2010, to 1.8% of exports (from 1.9% in 2009), with a further fall in 2011 (to 1.6%) and 2012 (1.4%).

Budget policy since 2009 has aimed at limiting the primary non-oil deficit to 9.5% of non-oil GDP, but this target was greatly exceeded (rising to 14%) because big wage increases for health and education workers pushed it up to XAF√É‚Äö√ā¬†379.7√É‚Äö√ā¬†billion (CFA francs BEAC), XAF√É‚Äö√ā¬†43.7√É‚Äö√ā¬†billion more than the budgeted XAF√É‚Äö√ā¬†336√É‚Äö√ā¬†billion.

The 2010 budget policy, which continued to focus on diversifying the economy, reduced government spending to 21.1% of GDP (from 24.8% in 2009), and this should keep falling in 2011 (to 20.0%) and 2012 (to 19.6%) with less recurrent expenditure √É¬Ę√Ę‚Äö¬¨√Ę‚ā¨Ňď wages and salaries were 6.2% of nominal GDP in 2010 (7.2% in 2009), after a survey found non-existent government employees and enabled various administrative irregularities to be corrected.

Government revenue fell slightly to 24.8% of nominal GDP (25.0% in 2009) owing to reduction of the tax burden to 12.9% (from 14.3% in 2009) which should continue to fall slightly in√É‚Äö√ā¬†2011 and 2012. Oil revenue rose to 10.7% of GDP (9.5% in 2009) and should slightly increase√É‚Äö√ā¬†due to higher production and the higher average price of Brent crude. This boosted the overall surplus to 3.7% of GDP (up from 0.2% in 2009), which is expected to rise to 4% in 2011 and 4.6% in 2012.

The policy of curbing government spending and increasing revenue, begun in 2009, continued in 2010 with modernisation of public-finance management by centralising (by computer) all goods and services supply bids under current purchases (spending not subject to public procurement laws), meaning that the government cannot buy items from a supplier not registered as government suppliers in its√É‚Äö√ā¬†Fichier des fournisseurs de l√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬ĘEtat√É‚Äö√ā¬†(2FE).

Steps have been taken since January 2011 to increase wage earners√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę buying power through lower taxes and a simpler tax system. Value added tax on a bag of cement and on metered water and electricity bills was cut from 18% to 5% and on bills from classic meters to 10%. The special tax per cubic metre of water was cut by 15% and on each kW/hour of electricity by 2.5%. The price of butane gas was brought down to XAF√É‚Äö√ā¬†5√É‚Äö√ā¬†450 from 6√É‚Äö√ā¬†000 per 12.5 kg bottle, and the electricity-metre rental charge was reduced.

The government issued bond loans in 2010 to help ease the public debt and this raised XAF√É‚Äö√ā¬†445√É‚Äö√ā¬†billion, according to the general directorate of the economy. Budget liquidity, which averaged 30% between 2002 and 2006, has steadily fallen to an expected 11% average between 2007 and 2012 as debt-service commitments made at the 5th, 6th and 7th Paris Club meetings come to an end.

The primary balance had a 5.5% surplus in 2010 (up from 2.1% in 2009) thanks to higher oil revenue, and this could improve to 6.2% in 2011 as current expenditure falls and oil and non-oil revenues decline slightly.

Table 4: Public finances (percentage of GDP)

√É‚Äö√ā¬†

2002

2007

2008

2009

2010

2011

2012

Total revenue and grants

31.7

29.9

32.2

25

24.8

24.8

24.6

Tax revenue

12.4

11.1

9.9

14.3

12.9

12.7

12.5

Oil revenue

17.7

17.5

21.1

9.5

10.7

11

11

Grants

-

-

-

-

-

-

-

Other revenues

1.5

1.3

1.2

1.1

1.1

1.1

1.1

Total expenditure and net lending (a)

28.2

21.3

20.1

24.8

21.1

20.4

20

Current expenditure

23.7

16.6

15.1

19

16.3

15.4

15.1

Excluding interest

19.3

14.4

13.4

17.2

14.5

13.9

13.7

Wages and salaries

6.4

5.5

5

7.2

6.2

6

6

Goods and services

4.6

3.5

3.2

3.9

3.3

3.1

3

Interest

4.4

2.2

1.8

1.9

1.8

1.6

1.4

Capital expenditure

4

4.5

4.6

5.8

4.8

5

4.9

Primary balance

7.9

10.8

13.9

2.1

5.5

6

5.9

Overall balance

3.5

8.6

12.1

0.2

3.7

4.4

4.6

a. Only major items are reported.

Source:Data from national authorities (DGE); estimates (e) and projections (p) based on authors√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ę calculations.

Figures for 2010 are estimates; for 2011 and later are projections.

Monetary Policy

Gabon is a member of the Central African Economic and Monetary Community (CEMAC) and its monetary policy is set by the Bank of Central African States (BEAC), which since the end of 2009 has aimed to recapitalise banks and further reduce debtor rates, as well as maintaining a steady and flexible compulsory minimum reserves policy.

The BEAC√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs recapitalisation policy has had no effect on banks that create money, because of their excess liquidity, so the recapitalisation target remained XAF√É‚Äö√ā¬†2√É‚Äö√ā¬†billion.

The BEAC√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs intervention rates and conditions were also unchanged in 2010, with the tendering interest rate at 4.25%, the repurchase rate at 6.00% and the minimum credit rate at 3.25%.

The interest rate on 7-day deposits was kept at 0.85%, at 0.85% plus 1/13 of a percentage point for 28 days, and at 0.85% plus 2/16 of a percentage point for 84√É‚Äö√ā¬†days. The interest rate for public investments in the reserve fund for future generations (TISPP0)√É‚Äö√ā¬†was 1.25%, for public investments of budget revenues (TISPP1) 2.05% and for special deposits (TISPP2)√É‚Äö√ā¬†0.85%.

The BEAC confirmed obligatory reserve requirement coefficients for demand deposits (11.75%) and time deposits (9.25%), along with the return on these reserves (0.05%), which were XAF√É‚Äö√ā¬†376√É‚Äö√ā¬†billion at the start of 2010 (a 10.4% fall from XAF√É‚Äö√ā¬†419.8√É‚Äö√ā¬†billion in 2009).

The BEAC intervenes by injecting liquidity through operations on tender offers and 2- to 7-day repurchase agreements by credit establishments, but since 2009, banks have not bid on positive offers because they have had comfortable cash balances, no banks have sought advances from the central bank and there has been practically no trading between banks. The only interbank transaction since 2009 amounted to just XAF√É‚Äö√ā¬†1.5√É‚Äö√ā¬†billion.

Inflation rose substantially in 2010 to an estimated 3.2% (up from 1.9% in 2009) but is expected to ease in 2011 and 2012 to 2.7%. All sectors contributed to higher prices, including transport (12.4%), communications (9.5%), housing, water and electricity (9%) and food items (7.5%).

The rise was because of dearer fuel as well as the indexing of petroleum-product prices and the rise in the price of crude, along with costlier imports and higher prices of electricity and water, as well as of housing as a result of strong demand.

External Position

The balance of payments improved substantially in 2010 after a reduction in the capital-balance deficit.

The same year, the current-account surplus rose to 14.3% of GDP (from 13.6% in 2009) as a result of√É‚Äö√ā¬†an improved trade balance estimated at 46.3% of GDP thanks to higher export earnings (59.7% of GDP, up from 53.7% in 2009) with good prices and a greater volume of crude oil and manganese exports.

The trade surplus should improve in 2011 to 48.3% of GDP and in 2012 to 48.5% thanks to higher export earnings, which should rise to 61.0% of GDP in 2011 and then slow a little to 60.8% of GDP in 2012.

Imports are steadily falling from 15.3% of GDP in 2009 to 13.4% in 2010, to 12.3% in 2012, owing to efforts to reorganise agriculture in order to boost market gardening, pig rearing and leafy-vegetable growing. Introduction at the end of 2009 of a no-breaks working day appears to have sparked this enthusiasm for this type of agriculture.

The services deficit deepened to 13.8% of GDP in 2010 (from 10.2% in 2009) because of the contraction in the √É¬Ę√Ę‚Äö¬¨√Ö‚Äúfreight and insurance√É¬Ę√Ę‚Äö¬¨√ā¬Ě (-19.3%) and √É¬Ę√Ę‚Äö¬¨√Ö‚Äútravel and subsistence√É¬Ę√Ę‚Äö¬¨√ā¬Ě (-9.0%) sub-sectors caused by problems in the country√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs maritime firms and airlines and the deterioration of most of its hosting facilities.

The revenues deficit also increased, to 16.7% of GDP√É‚Äö√ā¬† from 12.8% in 2009, because of simultaneous increases in returns on private capital (+57.1%) and in interests due on public external debt (+3.2%).

The capital deficit improved by 25.8% because of a 64.6% rise in foreign direct investment (FDI) largely through reinvested profits (+51.7%) and rescheduling of the public debt (the balance of which should move from

√É¬Ę√Ę‚Äö¬¨√Ę‚ā¨ŇďXAF√É‚Äö√ā¬†61.8√É‚Äö√ā¬†billion to +XAF√É‚Äö√ā¬†116.6√É‚Äö√ā¬†billion). The government sought to strengthen the country√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs macroeconomic position by means of a three-year (2007-10) programme with the International Monetary Fund (IMF) that will focus amongst others on the sustainability of public finances with a strategy adapted to manage reserves and the public debt.

The overall balance should show a XAF√É‚Äö√ā¬†78.7√É‚Äö√ā¬†billion surplus in 2010 after a XAF√É‚Äö√ā¬†400√É‚Äö√ā¬†million deficit in 2009, and be funded by building up the net external assets of the monetary authority by an equivalent amount.

Gabon, an active member of regional groupings CEMAC and the Economic Community of Central African States (ECCAS), broke off negotiations in February 2009 for economic partnership agreements (EPAs) with the European Union (EU) because of disagreement over the method for calculating the fiscal impact on the Central Africa sub-region. The EU wanted 71% access for its imports but Central Africa is pressing for only 60% over 25 years.

The dispute arose after a UN Economic Commission for Africa (ECA) study showed that EPAs could undermine regional integration and economic growth, and alter production processes. In fact, Cameroon√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs EPA signature in 2009 has not made it more competitive in the European market. Controlling the effects of EPAs on Central African economies requires gradual implementation, with a transition phase and assistance.

Private Sector Development

Efforts to encourage investment so as to further diversify the economy and expand industry continued in 2010. The government, aware that raw materials will not be the key to overall growth for ever, seems convinced of the need to boost small and medium-sized enterprises and industries (SMEs and SMIs). The private sector has been in steady decline for more than a decade for lack of clear, bold policy, and 80% of the 10√É‚Äö√ā¬†000 firms set up every two years fail by the end of that time.

The government wants to help the private sector expand, attract FDI and produce strong and lasting growth that will generate jobs. To move in this direction, partnership agreements have been made with several emerging countries (China, Singapore and India) to boost the private sector with assistance and more financial services with easier access. The government has set up a postal bank and a risk capital firm and curbed the cost of loans by introducing an attrition rate.

Other Recent Developments

The world financial crisis has underscored the need to diversify an economy still over-dependent on hydrocarbons. Growth of the private sector and better governance also required faster structural reform, which has had to take the 2009 recession into account.

Diversification of the national economy is therefore being pursued but there is now greater focus on international action, including strategic and structural agreements and partnerships such as a USD√É‚Äö√ā¬†4.5√É‚Äö√ā¬†billion deal signed in the last quarter of 2010 with multinational corporations in India and Singapore.

Pay and benefits to the heads of state and parastatal enterprises in the non-oil sector were capped at the start of 2010 to boost growth in this sector. Related steps involved lowering government subsidies, widening the tax base, abolishing special tax arrangements and exemptions, taxing the informal sector, stricter land taxation, combating special levies, strengthening consolidated revenue collection, reducing wage costs and helping firms be more competitive.

The government intends to limit current spending with internal cuts that can be used to pay for investment amounting to 42.8% of its own funding.

Some government ministries and political posts are to be abolished, ministry staff reduced and audits done of civil service personnel and wages, including arrears so their settlement can be scheduled.

The government planned in 2010 to be stricter with spending by boosting the public-procurement office√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs ability to process bids, streamlining inspection for faster handling of cases and better certification of work done before it is paid for.

Since the last quarter of 2009, the authorities have reduced the cost of managing the debt by using the stock market.

Sectoral policies have aimed at diversifying production and upgrading infrastructure as well as generating jobs in priority sectors such as forestry, agriculture, livestock and fisheries.

The government plans to continue developing national parks for tourism, training staff to look after them and setting up an attractive institutional, legal and regulatory framework.

Special efforts are being made to encourage sustainable development, including rational, economic and cautious use of community-owned forests and getting local people involved in managing eco-systems.

The government plans to give the country quality basic infrastructure for serious economic diversification by providing legal and regulatory support for private-public partnership and setting up an office to deal with major works projects.

The government is also trying to monitor more closely the quality of work being done and has decided to turn the√É‚Äö√ā¬†Ecole des techniciens des travaux publics√É‚Äö√ā¬†at Fougamou into a training centre for all construction and public works skills.

A framework agreement has been signed with the BGFIBANK group to build government offices and decide the exact nature and extent of the estimated XAF√É‚Äö√ā¬†120√É‚Äö√ā¬†billion programme and how it will be funded. It will involve leasing or renting a complex of offices in Libreville to be built by the government with BGFIBANK help.

Gabon has acquired more foreign partners since the beginning of 2010, giving it access to new funding from emerging countries for major infrastructure projects to meet the country√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs needs for investment, economic benefits and demand for jobs, housing and welfare.

The funding, expected to generate more than 50√É‚Äö√ā¬†000 direct and indirect jobs, will come in the form of FDI from China, India and Singapore and is a good example of government plans for partnership and co-operation with emerging-country multinationals, as also mentioned in the section √É¬Ę√Ę‚Äö¬¨√Ö‚ÄúRecent economic developments and prospects√É¬Ę√Ę‚Äö¬¨√ā¬Ě.

The Nkok special economic zone√É‚Äö√ā¬†will focus on wood processing (and the sector√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs value chain in particular), which is one of the country√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs strategic sectors after oil, with Olam, owned by a Singapore sovereign fund, as the government√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs main partner. The zone is 27 kilometres east of Libreville and 40% of its 1√É‚Äö√ā¬†146-hectare area will be occupied by industry, mainly wood processing with an annual capacity of 1√É‚Äö√ā¬†million m3, which should attract nearly USD√É‚Äö√ā¬†1√É‚Äö√ā¬†billion in investments and create about 9√É‚Äö√ā¬†000 direct jobs. A one-stop shop will be set up in the zone to speed up investor formalities. The project should encourage the opening of development zones elsewhere in the country.

The partner will be Olam, with 30% of the plantations held by about 3√É‚Äö√ā¬†000 Gabonese farmers who will be given training in palm-oil plantation management. The new industry should eventually bring in annual export earnings of about USD√É‚Äö√ā¬†800√É‚Äö√ā¬†million.

An Indian firm, M3M, is building 5√É‚Äö√ā¬†000 housing units costing less than USD√É‚Äö√ā¬†20√É‚Äö√ā¬†000 each. The two-year USD√É‚Äö√ā¬†100√É‚Äö√ā¬†million project, entirely funded by M3M, was due to start in October 2010.

The national constitution was amended by parliament on 28 December 2010 by more than the required two-thirds majority (177-16) and involved 36 articles and three paragraphs.

Disagreement about how to revise the electoral register for the 2009 presidential election could have set off a serious constitutional crisis that year. The president of the constitutional court also called for amendment of the constitution, the electoral law and laws about the multi-party system, to bring the legislation into line with the constitution so as to improve the rule of law in Gabon.

The main constitutional amendments were to extend the interim period from 45 to 60 days were the presidency to be vacated; to specify the interim president√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs oath of office (not previously mentioned in the constitution); to alter clauses about freedom of association and of religion, which remain basic rights; to define the president√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs national defence powers; and to provide the latter with extra powers when national independence and territory are seriously threatened.

During the previous early elections in 2009, the constitutional authorities themselves had blown the whistle on a number of constitutional weaknesses. These referred most particularly to Article 13, which stated that new elections were to be held within 30 days in case of presidential vacancy unless there were exceptional circumstances noted by the constitutional court. Critics said this was unrealistic and not long enough to draw up electoral lists, issue voting cards, declare candidacies and establish polling stations.

The amendments approved by parliament in December 2010, however, were criticised by the opposition. The key changes were to Articles 4 and 10, which the opposition said gave the government a √É¬Ę√Ę‚Äö¬¨√Ö‚Äúfree hand√É¬Ę√Ę‚Äö¬¨√ā¬Ě to rig the next elections. A new paragraph inserted in Article 4 provided for maintaining public services in case of a major event, natural disaster or declaration of war on the country requiring national mobilisation, which would prevent holding elections. Without depriving citizens of the right to vote, it said, the duty to express solidarity or fight for the country could in such circumstances lead to postponement of the elections and extension of current terms of office.

The clause allows the president to decide when to hold an election, giving him an advantage, critics say.√É‚Äö√ā¬† Access to the presidency is further restricted by an amendment to Article 10 excluding candidates with double nationality, who have held political or administrative positions in other countries or do not reside in Gabon.

Some consider this a wise move to avoid difficult situations seen in other African countries, but the opposition disagrees and also objects to the changes to Article 4.

The PDG, which has been in power since 1968, were able to push the amendments through parliament, though one of its members opposed them and two others were disciplined for criticising the method of amendment.

The opposition√É‚Äö√ā¬†Union nationale√É‚Äö√ā¬†(UN) party was disbanded in early 2011 after its secretary-general had himself sworn in as president of the country and appointed a parallel government, after which all its members took refuge on 25 January in the offices of the United Nations Development Programme (UNDP) in Libreville.

The government announced the dismissal of all civil servants belonging to the parallel government and said the parliamentary immunity of the parallel president might be removed pending prosecution.

About one-third of the population lives below the poverty line and more than 27% are unemployed, according to the central statistics office. The government is trying to expand primary and secondary school intake capacity, to reach a maximum of 30-40 pupils per class instead of the current 150. Science education has been reorganised, with some schools specialising in it, while vocational and technical education also needs to expand its enrolment capacity.

Schooling is compulsory between the ages of 6 and 16 and enrolment was over 96% in 2010. Nonetheless, 22% of the population describes itself as having no education and about half only received primary education, 16% junior secondary and only 6% completed all stages of secondary education.

The current LMD (Licence, Master, Doctorat) system (bachelor, master√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęs, doctorate) should lead to more profession-oriented higher education and quicker access to jobs, but funding is an obstacle. Each doctorate student costs about XAF√É‚Äö√ā¬†3√É‚Äö√ā¬†million, and universities have trouble finding this money in the absence of tuition fees. The national education conference in the second half of 2010 recommended improving infrastructure and equipment and upgrading the status of teachers and their living and working conditions.

Health care is seen as a priority but is still in next worst shape after education, with a pressing need for local clinics, treatment capacity and access to it.

The HIV/AIDS pandemic is fading, according to the programme fighting it, PLIST (Programme de lutte contre les infections sexuellement transmissibles et le Sida). Some 49√É‚Äö√ā¬†000 people are believed to be infected and a survey began in 2010 to update this figure. PLIST says sex workers are among the hardest hit, with a 20% prevalence rate of the disease, four times higher than the national average. The figure in the army is about 4%.

Social welfare has advanced with the introduction of the welfare fund√É‚Äö√ā¬†Caisse nationale d√É¬Ę√Ę‚Äö¬¨√Ę‚Äě¬Ęassurance maladie et de garantie sociale√É‚Äö√ā¬†(CNAMGS) and retired civil servants have been subject since January 2011 to a 1.5% levy on their gross pension and indexed bonus, which goes to the CNAMGS. In return, they get health-care coverage.

Access to safe drinking water and to electricity is still a major problem and the state firm supplying both needs to be reorganised. The government is considering regulating the sector.

The 2010 UN Human Development Index (HDI) ranks Gabon√É‚Äö√ā¬†2nd among sub-Saharan states with a rating of 0.648, and 93rd among 169 countries, in the Medium Human Development category. The HDI ranking does not match the ranking based on per capita income. Life expectancy has risen from 54.4 years in 1980 to 61.3 in 2010, and the average length of schooling from 2.3 years to 7.5. Per capita income at purchasing power parity fell 23%, however.